On Friday, numerous federal agencies announced new rules that allow employers to opt out of providing no-cost contraceptives to employees by claiming religious or moral objections. California law blunts, but not entirely, the impact of this rule change. California’s Contraceptive Coverage Equity Act of 2014 requires private and Medicaid managed care plans offered in the state to provide the same range of no-cost contraceptives as required by federal law prior to Friday’s rule change. This state law does not apply to roughly 25% of California employees (4.6 million) who work for employers who fund their own insurance. Only three other states have laws similar to California’s, so the federal rule change impacts most employees across the nation.
Also on Friday, California Attorney General Xavier Becerra sued the Trump administration over the changes to federal rules, arguing that the changes violate the U.S. Constitution and federal law.
The new rules expand the types of employers who can avoid providing no-cost contraceptives through their health insurance plans, and the reasons they can offer to do so. Previously, only houses of worship could claim a complete “exemption” from the free contraceptives requirement. A more narrow group of employers with religious objections could request an “accommodation.” With an accommodation, the employers could avoid paying for their employees’ contraceptives and shift the cost to the insurer, but the employees would still receive contraceptives with no co-pay. The current rule change extends “exemptions” to all types of employers who claim religious objections and employers other than publicly held companies that claim “moral convictions” against providing contraceptive coverage to employees. Institutions of higher education may also claim these exemptions and avoid funding contraceptives as part of student health insurance.
The new rules primarily affect the cost of contraceptives for employees, rather than coverage of them by employer plans, since federal civil rights law requires employers to include prescription contraceptives if they cover other prescription preventative care. But, as a recent Kaiser Family Foundation report points out, even low co-pays limit access to contraceptives, and increase the risk of unintended pregnancy. The report, written prior to Friday’s rule change, concludes:
If the Trump Administration modifies or eliminates the ACA contraceptive coverage rule, scope of coverage will depend on where a woman lives, where she works, and her insurance plan. Millions of women could lose no-cost coverage for the full range of contraceptive methods. Insurance companies and employers will be the ones to make choices about coverage and cost-sharing. For some women, their choices will be limited, and some of the most effective and costly methods will be out of financial reach.
For more information on the federal rulemaking process, see the Federal Register’s Guide to the Rulemaking Process.